Is this a search company?

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Google. When you read that word, the first thing you probably thought of was search. Considering Google accounts for around 70% of all web searches in the world (or about 85% of the English-speaking world), and has done for a decade, that’s not a huge surprise. Heck, Google’s search engine is so renowned and ubiquitous that it’s one of only a few brands that has slipped from protected, trademarked usage into the common vernacular. It is not unusual to google instead of search for something (even if you’re using Yahoo or Bing!), much in the same way that you use a thermos or tear off some cellophane (both of which used to be capitalized trademarks).

You’re probably aware that Google has other products, like Maps, Google+, or Blogger, but they’re so inconsequential in the grand scheme of things, compared to Search. You could probably argue that Gmail and Android are important products — but to be honest, even in the case of Android’s hundreds of millions of users, it’s not like anything much would happen if Google ceased development — its open-source nature means anyone (Samsung, Microsoft, etc.) could pick it up and run with it. Losing Gmail would be a pain in the ass, but there are plenty of viable alternatives out there. If we lost Google Search, however, we’d be distraught and discombobulated. Bing is just about usable in the US, and China has Baidu, but that’s about it. Google Search is a fundamental part of the internet. Without it, entire swaths of the web would be deprecated and quickly laid to waste. I don’t think it’s hyperbolic to suggest that, without Google Search, society as we know it would change dramatically.

It is a little bit scary that one service has so much significance. The phrase “don’t put all your eggs in one basket” comes to mind. Having a single point of failure, especially when the service is as important as Google Search, is never a good idea. In much the same way that we have multiple water reservoirs, power stations, hospitals, and schools, we really shouldn’t have just one viable search engine. Google could turn Search off tomorrow, if it really wanted to.

But — and now we get to the crux of the matter — while Search is an important part of your life, it is the complete and utter be-all and end-all lifeblood of Google itself. Without Search, Google would have to fire the majority of its workforce or face losing billions of dollars per year. As of the end of 2013, 91% of Google’s income derived from advertising — the bulk of which stems from paid ads on search results. The remaining 9% comes from a mix of sources, but mostly Google Apps (Google’s enterprise version of Gmail and Docs/Drive). Everything else — Android, Gmail, Docs, Blogger, Maps, etc. — is just icing on the cake; benevolent gifts from the great Web Father in the sky that generate almost zero profit. To derive 91% of your revenue from a single source is incredibly dangerous. In much the same way that Google poached the search market from Yahoo, Altavista, and others, another startup could pull the very same trick on Google itself. Despite booming revenues and profits, Google is precariously placed. The online display advertising business will not exist forever. The search company needs to do something, and quick.

Diversification

In a word, what Google needs to do is diversify — it needs to develop new revenue streams that, ideally, aren’t connected to its advertising products. As it stands, almost all of Google’s web properties (except Apps) generate their money from display ads, which are managed by the AdSense and DoubleClick programs (and yes, both are owned by Google). Google Apps, which sells a monthly subscription of Gmail, Docs, Calendar, and Drive to businesses, is a good start — but Google needs more.

Just so you understand the scale of the challenge that Google faces in its attempt to diversify, let me give you a few more figures. Google’s revenues last quarter were $14.9 billion. 91% of that, or $12.54 billion, derived from advertising. The other $1.23 billion comes from “other Google revenues,” which mostly stem from Google Apps subscriptions. Android, despite it being shipped on over 200 million smartphones in 2013, provides negligible revenue. (At the end of 2012, it was estimated that Google had only made $550 million from Android devices, but almost $2 billion from iOS devices. These figures have surely changed in 2013, but the fact remains that Android isn’t a big money maker.) Chrome, the browser, generates advertising revenue and nothing more — ditto Blogger. Maps, News, Plus — no income here. Basically, it’s advertising and Apps, and that’s it.

Of course, this isn’t to say that Google isn’t trying to diversify. In fact, Google is somewhat famous for its “throw it at the wall and see what sticks” approach, which has resulted in the company running a vast number of free products and services. Almost none of these services, though, make any money — and in many cases probably cost Google a lot of money to continually develop and keep online. After becoming CEO in 2011, Larry Page very quickly started the process of shuttering many of these services, stating that Google needed to put “more wood behind fewer arrows.”

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good article. obviously next big thing is gonna be home automation but having more comfortable life in the future is going to cost us our privacy

AdamWL

There is no such thing as privacy. There are 7 billion people on this planet you will not get privacy.

Deidara

basically what i trying to say is the more comfortable your life gets less privacy you’ll have. based on what level of privacy you want there are still workarounds in today’s world but in the future you no longer have options.

agenius

Have you been asleep for the past two years or so? : ) Privacy is about as outdated a concept as steam locomotives. Unless you mean to move to darkest Africa or the deep Amazon, that is…

Richard Melito

“Google could turn Search off tomorrow, if I really wanted to.”

“…turn Search off tomorrow, if I really wanted to.”

“…off tomorrow, if I really wanted to.”

“…if I really wanted to.”

“…I really wanted…”
“…I…”

Sebastian Anthony is lord of Google. Our beloved tech news writer holds the fate of the internet in his hands.

Elisha Bentzi

The next big thing, is under the radar, CHANGE OF THE MONOPOLY of the global financial system. “Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild.
Google have 60 billions on bank, thats is nothing. The US goverment is printing each month 80 billions. Thats is the real problem. we need competition in the money business, this monopoly is hurting our savings, our work.
Bitcoin is just a desperate measure.
We have a design, for a new financial system, but we need a capital to develop. Any advice is welcome. mutualwelfare.org

mrseanpaul81

Although I like bitcoin,but I don’t subscribe to the libertarian view that you’ve express. I am more excited about the next application of bitcoin besides a currency, like smart propery, Decentralized Autonomous Organisation,…

Elisha Bentzi

Yes, the most importan thing is the use of a new monetary system to crowd funding everything. Decentralized Autonomous Organization is not a technological problem, is a Change of Mind, a Different View of Life, then the only way to have DAO is to educate the children, if you have the time, download for free our book in our web or buy it on amazon. Note: i dont believe that bitcoin is a solution, because have many estructural problems that can´t not be resolved. We propose a solution, our financial system, that is not bitcoin. Thanks

ephemeris

Do you think that Google is going to be as patent visuous as Apple ? Mean with most of the data that they have,and enlisting so many lifestyles into their accounting. Would be more difficult to be a self made person,than the monopoly that Google could give themselves ‘as will’,in turning those habits into patented objects.

The example of the home energy scenerio. There, ..that is nothing new. Add to your example,home electric power networking,and you have a tendered relavant system. With store bought components the system could be created. Power companies are even doing this .(But personaly you’ve got to watch out for their modems query or you will get caught in the cosmic background radiation – least w/o a penny in your pocket).

Although I haven’t had a big run of paying Google – I mostly use their search. Would not like a patent pend type Google tax because the ‘rent -a-device-by -virtue-of-networked-feature,.. is utilized by some algorythm in their own patent(s). Mean the DIY,usually does only that as -do-it-yourself. Still makes what one to many does sometimes less than palatable.

Still dont see a lot of ‘Google products. And really it will be when everyone starts to notice just what Google has,that their decision will make the difference. Outside of what-most-persons-base-their-reasons (IP?) on. Might it be in the future that if you do not have Rs,Cs,IPs – you may be ‘required to be on a database. And w/o that you could not ‘really be considered on your own.

Conductor at the train station never considers what watch ‘your wearing’.

mrseanpaul81

tl;dr + the first few sentences didn’t make much sense

Gevera

I honestly don’t believe that google is willing to make this world better in a sense that it invests money in things that will not help humanity

Jillian

wow 14 billion for adsense. Theyre huge. I personally thing google is outa control with power at this point, however they do provide an incredibly lucrative position. Just take advantage of the opportunities the monster provides. I’ve been able to make $1k a month just from adsense. I use http://130dollarsaday.com , I just take advantage of it. I don’t like them snooping through my browser, or knowing where I am with my android google maps lol, but with that profit comes sharing. Just make some money off the monster and you wont be whining anymore.

Nat

Not sure about that “AC on because wife googled hot flashes” reference. You lost me there, thanks.

Joel Detrow

I think Google Fiber could easily be another source of profit for them. They aren’t the only US company offering Gigabit fiber for $70 a month, after all – just the biggest.

eonvee375

Google has a good chance of taking over the world ^^

But like i said before “they sure arent perfect but better them than someone else”

Sebastian, I have to mildly disagree with you regarding Google’s future.

Right now, Google is willing and able to invest vast sums of cash in acquisitions and internal R&D giving them proprietary insight into how each of those industries evolve and establishing Google’s role in that evolution. As you point out, there is a great distance between the revenue they currently derive from search and virtually everything else they do. So at best, their investments are like scouts at the front of a platoon, providing early-warning signals on when to engage the mainline troops.

More likely is a deep and wide evolution of Google’s search engine itself. Google will continue to morph and optimize its search services, further embed them in devices and platforms, and improve the human factors associated with using search, and eventually go one step further than search does today, but it will be a truly defining next step. The paradigm of today is simply, “search for an answer”. Once you have the answer to your question(s), the next step is to make a decision with the new knowledge you now have. Evolving search into “decisions derived from answers to questions” and doing so with an extreme amount of vertical industry knowledge density — and similar characterization of information about the individual — will enable a different use-case paradigm that creates a stickiness factor far beyond what they even have today.

A crude precursor to that re-imagined search tool might be the integration of IBM’s Watson with Google, personalized to each user of the service. It will continue to learn, adjust and make better informed choices and decision recommendations as time marches on. Learning from good and bad decisions we all make over time results in something we all strive for: Wisdom. Obtaining that early in life is priceless. Google will fine a way to monetize it. That’s where they’re headed, IMHO

http://www.mrseb.co.uk/ Sebastian Anthony

Well, despite you protesting your disagreement, I think it sounds like we both have a pretty similar vision of where Google will end up :)

It’s kind of implied that, if Google wants to become more than just a “search for an answer” engine, it needs a lot more data points. It needs those thermostats, robots, cars, etc.

Yes, you’re right that Google’s primary source of revenue might always be search. I’m sure it will be for a long, long time to come.

Anthony

There is a major flaw in all of this newfangled automated tech and having everything connected to – well everything – then having it controlled by someone else in a monstrous company who’s in bed with a privacy pirating government.
Many people like my self see this as just another prospect aimed at ‘big brother over your shoulder’ capability which opens the doors, or rather blows them off the hinges for programs like NSA to monitor every aspect of your life and horde such information. Who in turn will do whatever they please with the information they find. For all we know they could be gathering large amounts of incriminating data only to later hold it over our heads unless we do as they see fit. Pretty much a ‘do as we say or be jailed because we have ‘dirt’ on you’ scenario.

I love technology, i was typing in DOS on my radio shack green screen to get to my joust game and kings quest when i was 4, and have expanded since then to pc board layout design and manufacturing on a small scale. So it’s extremely frustrating to see amazing technology come out only to be ruined by purposeful ignorance like this. Essentially bastardizing technology left and right to track and spy on people under the guise of simplicity and ease of life. Such technology on a large scale can also open the doors to ultra tech savvy people who may use your own home automation against you by locking you in your own bedroom while people raid your house, or locking you out of your own house to mug you outside, etc. It’s just plain sad that we have to think like this before getting excited about new tech.

“There is no such thing as privacy. There are 7 billion people on this planet you will not get privacy.” is a silly comment at best. That’s like saying, “There’s billions of animals in the ocean, you’ll never find a spot to swim in.” If you want privacy it can be had, it just takes commitment and money. Most people don’t want to do that because it requires drastic life style alterations beyond what they see as personally rational or feasible.
Everything from “i live check to check and struggle enough as it is – that’s just out of my reach.” All the way up to the father who is financially capable and would personally commit, but doesn’t want to hear his uppity daughter complain about no internet in the back country because she can’t send her skanky workout pics to everyone on facebook/instagram.

Point is, depending what umbrella you live under – the more automated everything gets the less privacy we have, period. As a result I don’t see this this being viable for people abroad to invest in. But, if pitched properly it could take foothold in the mass amount of sheeple we have in this country that blindly buy attractive but soulless products. *coughApplecough* Buying into a lifestyle and purchasing what is essentially a wireless hub that funnels you into spending money on only what they make and provide. (A self imposed monopoly.) What i like to call, perpetual purposeful ignorance.

Jailbreakbird

They should be brought up before the Justice Dept. for illegal product tying, they are an illegal monopoly.

mrseanpaul81

The most obvious monopoly is the cable company industry. That should be address way before Google. I can switch to Bing, or Yahoo, ….but I can’t get cable without going to Comcast in my area, period!

http://ionintel.blogspot.com/ Aerosheet

Everyday I see how much people rely on Google, I begin to wonder how the world will be affected if Google is taken out. It’s pretty shocking if you think about it….great article!

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